Pyaterochka and Rostelecom Launch Redevelopment ProjectMoscow, 11 March 2015 – X5 Retail Group N.V. (‘X5’ or the ‘Company’), a leading Russian food retailer (LSE ticker: ‘FIVE’), announced today the signing of a letter of intent (the ‘Letter’) between Pyaterochka, the Company’s proximity format, and Rostelecom.
Under the terms of the Letter, the parties will form a long-term partnership to enhance the effective use of real estate currently owned by Rostelecom. During the period from 2015 to 2017, Pyaterochka will be able to purchase or lease (under long-term contracts) real estate from Rostelecom to open approximately 300 new proximity stores with an average selling space of more than 350 square meters.
The redevelopment program will be rolled out across most of Rostelecom's footprint in Russia, which spans 57 regions.
The first Pyaterochka store at a Rostelecom facility opened in Novocheboksarsk on 6 March 2014. The second store is slated for opening in April 2014 in the town of Semenov (Nizhny Novgorod Region).
Rostelecom is currently in the process of upgrading its technologies, which is increasingly reducing the space required to host equipment. Rostelecom's real estate facilities are located all across Russia and consist mostly of production buildings in existing and established neighbourhoods of towns and cities.
One of the ways to optimize the under-utilized space is through redevelopment – property upgrade and renewal contributing to more effective use.
Vice-President for Administrative Issues OJSC Rostelecom Alexandr Abramkov:
“One of the options for optimization of under-utilized space is redevelopment. In this case the interests of Rostelecom and X5 coincide”.
General Director of Pyaterochka Olga Naumova:
“Pyaterochka is interested in additional opportunities for opening stores. This will create new jobs and offer consumers in different regions quality products at affordable prices. I am sure that our cooperation with Rostelecom on the redevelopment project will be mutually beneficial and positive for the customer”.
X5 Retail Group
X5 Retail Group is the leading food retailer in Russia. X5 shares are listed on London Stock Echange (LSE) in the form of Global Depositary Receipts. The Company operates several retail formats, including the chain of conveniently located proximity stores under the Pyaterochka brand, the supermarket chain under the Perekrestok brand, the hypermarket chain under the Karusel brand and Express convenience stores.